The KOSPI tumbled more than 3% to retreat below the 7,300 mark, weighed down by fatigue from a short-term rally and global macroeconomic headwinds. Foreign investors unleashed a selling avalanche exceeding 42 trillion won cumulatively over nine consecutive trading sessions, sending leading stocks into a collective slump. Samsung Electronics (005930.KS), the top stock by market capitalization, briefly attempted to turn positive on hopes for a labor-management settlement but ultimately closed lower.
The KOSPI closed at 7,271.66 on Wednesday, down 244.38 points, or 3.25%, from the previous trading day. The index opened down 1.20% at 7,425.66 and retreated to the 7,140 level intraday amid heavy foreign selling. It pared losses in the afternoon and attempted to recover the 7,300 line, but lost upward momentum as selling resumed near the close. The KOSDAQ also closed at 1,084.36, down 26.73 points, or 2.41%, surrendering the 1,100 level.
Foreigners were once again the main driver of the market plunge. They net sold 6.26 trillion won (6,262.2 billion won) worth of shares on the main bourse Wednesday, the second-largest figure during the nine-session selling streak, trailing only the 6.72 trillion won recorded on May 7, the first day of the streak. Retail investors alone absorbed 5.63 trillion won in selling, and institutions net bought 526.3 billion won in a defensive effort, but the combined buying was insufficient to counter the foreign onslaught. Cumulative foreign net selling over the period reached 42.0152 trillion won.
Samsung Electronics, which had raised hopes by briefly turning positive in the afternoon, also failed to close in the green. The stock plunged as much as 5.51% intraday to 266,000 won but rebounded to flat territory amid signals of possible union concessions under mediation by the National Labor Relations Commission (NLRC). However, a wave of selling just before the close pushed it to a finish of 275,500 won, down 1.96% from the previous day. Market watchers expect the outcome of tonight's final labor-management negotiations to be a watershed moment that will determine the direction not only of Samsung Electronics but also of the broader Korean stock market.
Other large-cap stocks posted dismal results. SK hynix (000660.KS) plunged 5.16% to 1,745,000 won following remarks by Seagate's CEO raising concerns about AI infrastructure bottlenecks. Hanmi Semiconductor fell 9.15%, and SK Square dropped 6.68%. Auto group stocks slumped together, with Hyundai Motor (005380.KS) down 8.90% and Hyundai Mobis down 8.06% as their robot momentum eroded. LG Electronics, which had recently rallied sharply, also plunged 11.66%.
Even amid the panic, the defense sector — buoyed by persistent geopolitical risks and ongoing order momentum — closed higher, with Hanwha Aerospace (012450.KS) up 4.81% and LIG Defense and Aerospace up 2.74%. Korea Electric Power, a defensive utility play, rose 3.98%, and LG Innotek climbed 4.34% on positive smartphone component news, showing differentiated strength.
Analysts diagnose that while the KOSPI is retreating at an unusual pace after touching the 8,000 mark, this represents a strong digestion of short-term overheating rather than a complete departure from the uptrend. They note that valuation pressure is not significant, with the KOSPI's 12-month forward P/E ratio at around 7.4 times. "The market will likely build a bottom while watching key events, including Nvidia's earnings release scheduled for the 21st in the U.S. and the outcome of Samsung Electronics' labor-management negotiations," a market source said.
